SeeqPod CEO: Acquisition Imminent

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SeeqPod CEO: Acquisition Imminent

Music search engine SeeqPod is on the verge of being acquired by a major new media company, CEO Kasian Franks told wired.com Monday, which he hopes will let his company partner with, rather than battle, the major record labels currently trying to sue it out of existence.

Franks wouldn't name the White Knight but said the company was large enough to convince the major labels to license rather than crush his search technology — which hosts no infringing files, but lets users play and collect MP3s that are scattered around the internet. SeeqPod is now in "final acquisition talks," with little more than the transfer of payment needed to finalize the transaction.

Once that happens, he says, the company that's acquiring SeeqPod will use its technology to search for not only music, but "most other file types" as well – videos, Flash animations, and so on.

"The litigation is a non-issue in respect to people at the top," said Franks. "I wish we could go to talk to Barry Diller, who is the owner of IAC [which operates Ask, Citysearch, Evite and other properties] — Warner's on the board there too — and tell him, 'you know what, we're going to execute a lateral partnership across Warner Music, Sony and Universal.'

"I'm not in that position right now," continued Franks. "I'm primarily a technologist, so I don't have the social capital that it takes to execute on something like that. But our partners do. You know how that works, right? These guys are going to talk to their buddies, and they'll execute on a partnership that will alleviate the lawsuit."

He pointed to Apple, Google, Live Nation as other examples of companies large enough — and with the right connections — to convince the labels to drop the suits and license SeeqPod.

"Our partner is in that position," explained Franks.

Since its launch in 2006, SeeqPod has consistently impressed us with the way it unites music scattered around the internet into one interface, like an iPod whose hard drive is the cloud. Despite hosting no music, SeeqPod has faced heavy legal pressure, first from Warner and then from EMI. Both claim the search engine infringes on their music copyrights. Backed into a corner, the site filed for bankruptcy, began selling its core code for $5,000 a copy, and put itself on the market.

An outage knocked Seeqpod out over the weekend. Because recently new music services seem either to capitulate (Muxtape) or to offer the labels equity in their companies (MySpace) after being sued, there was widespread speculation that the end was nigh for SeeqPod.

Not so, Kasian told us. "The site is down, based on moving some servers here and there, and we have experienced an outage, and that's based on a database crash."

While it will save his company, selling it was not Franks' first choice, and it won't make him rich: the economy and major label litigation forced his hand in selling now, at a considerable loss to investors, who had pumped an estimated $7 million into the company. It could be a dangerous precedent for other search innovators, who had previously considered themselves protected by the Digital Millenium Copyright Act, which says search engines can link to whatever they want so long as they remove allegedly infringing links when notified by copyright holders.

"The record industry threats and lawsuits against SeeqPod, Muxtape, MP3Tunes, Veoh, and other hosting and search companies are sending a clear message to entrepreneurs," Fred von Lohmann, senior staff attorney for the Electronic Freedom Foundation, told wired.com. "If you're going to build your business around the DMCA safe harbors, you also need a litigation war chest to defend against the record industry lawyers. But if you have been careful about complying with the DMCA safe harbors and can afford the lawyers, the courts are coming out the right way (see UMG v. Veoh)."

If the acquisition is finalized, which Franks says it has to be within the next two months, he will be "kicked out" of the company, but he doesn't seem to mind. What's important to him, he says, is seeing SeeqPod's technology survive. In addition to selling SeeqPod to this mystery company, he says he'll carry on his work with other companies, including one in which existing SeeqPod staff will support the "hundreds" of companies that already run on SeeqPod's API, ostensibly for $100K per year and up.

"We're looking at an ecosystem that's going to change search," predicted Franks. "Google is the mainframe of search, while SeeqPod is looking at search – playable search – as a distributed system, or grid, that needs to be supported. Litigation, for us, is just a distraction at this point."

SeeqPod's search engine allows people to listen to and share playlists made from the music hiding in plain sight on the internet, but according to Franks, it can be part of a model in which artists and copyright holders are paid.

"Music is like a comet," he said. "A comet has a tail. If the comet didn't have a tail, it would be an asteroid. And the only value in an asteroid is its death. When it hits a planet, it actually creates something, and that's it. A piece of music – the value of a piece of art, or music, or content – has to do with everything that surrounds it."

By this, he said he was referring to merchandise, show tickets, and whatever other ways artists and copyright holders come up with for monetizing music.

"Artists, throughout history, from the dawn of humanity, have always created new, innovative ways to monetize their art, whether it was with public performances, be it Ovid or Shakespeare, or whether it was published works that were sold," said Franks. "We need to think in those terms, and I think search engines will play a big role in that."